by By Paul Davidson, USA TODAY

by By Paul Davidson, USA TODAY

The Federal Reserve is not expected to make any significant changes to its bond-buying stimulus at a two-day meeting that concludes Wednesday.

It could, however, subtly refine the language of its post-meeting statement to stress that it plans to keep its benchmark short-term interest rate near zero for a lengthy period.

The Fed is buying $85 billion a month in Treasury bonds and mortgage-backed securities to hold down long-term interest rates and stimulate economic activity.

Last month, Fed Chairman Ben Bernanke rattled financial markets when he said the central bank likely would begin reducing the monthly purchases later this year and end them by mid-2014 if the labor market continues to improve.

But in recent weeks, stocks recovered and bond yields edged down after Bernanke and other Fed policymakers said a paring back of the purchases doesn't foreshadow an earlier hike in the Fed's key short-term interest rate. The federal funds rate, what banks charge each other for overnight loans, is expected to stay near zero at least until the 7.6% unemployment rate falls to 6.5%, as long as the inflation outlook remains below 2.5%. Most Fed policymakers foresee the first rate hike in 2015, and Bernanke has said it may come well after the jobless rate hits 6.5%.

Bernanke also has said a scaleback in the bond-buying would be put off if the economy and job market stumble in the next few months amid federal spending cuts and a January increase in payroll taxes.

Like many economists, Paul Ashworth of Capital Economics expects the Fed to begin tapering down the bond purchases in September.

This week, he says, the Fed could tweak the language of its statement to note that 6.5% is a threshold, not a trigger, for raising the fed funds rate - meaning the rate could remain near zero for considerably longer. It also could state that any rise in the rate is likely to be gradual. While Bernanke and other Fed officials have made these points, including them in the statement could further reassure investors.

A more significant change in the statement would be to lower the 6.5% threshold for raising the funds rate to 6%, a move that Bernanke has discussed and that could exert more downward pressure on interest rates. That might make sense if the unemployment rate were dropping because fewer people are working or looking for work, rather than healthy job growth.

The Fed also could state that it will maintain near-zero interest rates if inflation is below a specified target, such as 1% or 1.5%. Very low inflation can lead to a worrisome fall in prices and even recession. Annual inflation had been 1.3% but jumped to 1.8% in June.

Ashworth, however, says such larger changes in Fed policy are unlikely this week. The Fed, he notes, is not releasing updated economic forecasts - which could justify any revisions - and no news conference is scheduled, giving Bernanke no opportunity to explain changes to investors and the public.

"I think it would be a strange time to do it," he says.

With markets better understanding the Fed's message recently, policymakers may decide to leave well enough alone.